UPDATE 1-EU antitrust chief rejects Intel comment on charges

(Previous BRUSSELS; adds background, EU spokesman quote)

By Huw Jones

JOUY-EN JOSAS, France, July 18 (Reuters) - European Union Competition Commissioner Neelie Kroes on Friday rejected chipmaker Intel's (INTC.O) remarks that new charges filed against it by the European Commission would lead to higher prices for consumers.

The Commission issued additional charges against Intel on Thursday, saying the U.S. company had paid a retailer to refrain from selling computers with chips made by competitor Advanced Micro Devices (AMD.N).

The Commission, the EU's executive arm, said the practice damaged competition.

"I am a bit surprised about their remarks. You can be absolutely sure (at) the Commission we are working like hell to give the customer a better competitive situation and that means more choice and better prices," Kroes told Reuters.

"Tell the Intel people they can be absolutely sure that I stick to my line," she said on the sidelines of an EU industry ministers meeting.

On Thursday, Intel lawyer Steve Rodgers said he was disappointed by the new charges.

"The result will be higher computer prices because it prevents Intel from offering discounts," he said. "Offering discounts is central to competition and good for consumers."

But the Commission said it would be wrong to characterise payments to a retailer as discounts.

"You can only give a discount if you sell a product directly to the company concerned. In this case, we are talking about a payment made for not selling computers with somebody else's product inside," Commission spokesman Jonathan Todd said.

The supplemental "statement of objections" issued on Thursday by the Commission followed 2007 charges that Intel, the world's biggest microchip producer, gave computer makers rebates to limit their use of AMD chips or avoid them altogether.

The expansion of the accusation means the Commission is now weighing charges that Intel illegally fiddled with both the wholesale and retail channels in an effort to suppress its competitor.

Intel has its logo on four-fifths of the central processing units (CPUs) -- the chips at the heart of all PCs -- that run the world's 1 billion PCs, while AMD accounts for the rest.

The Commission could fine Intel, though any penalty would be unlikely to approach a cap of 10 percent of annual turnover. (Additional reporting and writing by David Lawsky in Brussels; Editing by Dale Hudson)